Saturday, July 21, 2012

Viacom, DirecTV come to agreement: $600 million more annually for Viacom

They're back. All those Viacom channels that were missing from your DirecTV guide have returned, thanks to the companies coming to terms.

Viacom and the nation's No. 1 satellite TV provider have been at odds for some time, with channels such as MTV, Nickelodeon, and Comedy Central being dropped from DirecTV early last week. The financial terms have not been "publicly disclosed," but as is typical, "loose lips sink ships."

According to sources, the deal will transfer $600 million a year in programming fees from DirecTV's bank account to Viacom's coffers, up at least 20 percent from the companies' previous agreement. The new agreement is good for seven years, so DirecTV subscribers can look forward to another blackout, er, disagreement in 2019.

Earlier, DirecTV said that Viacom was demanding a 30 percent increase. With the new deal, according to Amy Yong, an analyst at Macquarie Capital USA Inc. in New York, both companies can say they won. "DirecTV got a deal that was less than Viacom wanted, so on the margin, that’s a win for DirecTV. But it’s also a win for Viacom because they get more money.”

In addition, DirecTV is not required to carry the movie channel Epix, which it had said Viacom was demanding it carry, to the tune of over $500 million. Viacom denied the claim.

Another dispute between a content provider and a satellite TV company is still ongoing. About 14 million Dish Network customers lost access to AMC channels last month. One has to imagine that Dish subscribers are hoping the deal is inked before the next season of "The Walking Dead" begins.

The loser, in the Viacom - DirecTV deal is, of course, the consumer. These costs will naturally be passed on to DirecTV subscribers. The question is not if, but when.

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